Just heading out but talked to relative who booked all his NH3 in ND and converted to Canadian and doing all the conversions the price paid is
# .33 cents a lb #
He will take about 6000 acres at 80lb now.
$158,400.00 Canadian
Now our farm will need over 6000 but for comparison.
6000 x .553 x 80 = $265,440.00 Canadian
That's a difference of $107,040.00
Some thing is wrong with this picture since his is coming from Belleplain and so is mine.
Recent article in USA paper
DALE HILDEBRANT, Farm & Ranch Guide
“Anhydrous ammonia about the same price at between $450 to $480 a ton, and phosphate has gone up $100 a ton this year as well,” Franzen noted. “Urea prices are at record highs and I have never seen 28 percent this high before, however, ammonia prices are off a little from their all time high.”
In assessing the current price situation, Franzen noted that in the past the price of natural gas has been the main driver in the price of nitrogen fertilizer, which it still is. But nitrogen fertilizer prices shouldn't be this high according to natural gas prices.
“The problem is that in 2005 most of the fertilizer suppliers and dealers took a very strong position on storage and they put a lot in storage anticipating an increase in spring sales,” he explained. “That increase didn't happen, there was excess supply in the country and the price went down. The first time in 30 years that I have been around the fertilizer business that spring prices were less than fall prices.
“That put a bad taste in the mouth of the fertilizer industry and they decided they weren't going to lay in those large supplies again this year,” he continued. “And in the mean time we have had all these ethanol plants come in. We're going to be seeding seven to eight percent more corn across the country and corn sucks up fertilizer many times more than what we would put on for wheat. In fact, if you look at a seven to eight percent increase in corn acres in the Corn Belt, that equals the amount of nitrogen and phosphorus that we apply in the entire state of North Dakota. So it's like adding an entire state of demand.
“And since the suppliers aren't filled up with product we have a shortage developing. You can't just call up St. Paul and have it come in, because they don't make nitrogen in the United States anymore. It's manufactured in countries like Kuwait and Venezuela, and you just don't call up Kuwait and ask them to send up a barge of nitrogen tomorrow. It doesn't happen and we have this huge shortage,” he added.
This shortage - and not so much the price of natural gas since that price is actually cheaper than it was last year - is actually what's created the increase in price.
Franzen noted that the fertilizer industry needs to develop a plan where they can order the product a year in advance with some confidence.
“It used to be fairly easy to predict,” he said. “You had farm programs and you had to plant so many acres of corn, so many acres of this and so many acres of that. Now, it's completely flexible and people can change their mind on a whim. So if you take a strong position on fertilizer and have a large supply you can get burned. But then if you take a weak position and you don't have enough for your customers that's a big problem, too.
“Somehow this problem needs to be resolved, and I think it's in the middle of being resolved now. Unfortunately, the prices are high and the growers are the ones that have to bear the brunt of all of this while they are trying to figure out what to do,” he concluded
# .33 cents a lb #
He will take about 6000 acres at 80lb now.
$158,400.00 Canadian
Now our farm will need over 6000 but for comparison.
6000 x .553 x 80 = $265,440.00 Canadian
That's a difference of $107,040.00
Some thing is wrong with this picture since his is coming from Belleplain and so is mine.
Recent article in USA paper
DALE HILDEBRANT, Farm & Ranch Guide
“Anhydrous ammonia about the same price at between $450 to $480 a ton, and phosphate has gone up $100 a ton this year as well,” Franzen noted. “Urea prices are at record highs and I have never seen 28 percent this high before, however, ammonia prices are off a little from their all time high.”
In assessing the current price situation, Franzen noted that in the past the price of natural gas has been the main driver in the price of nitrogen fertilizer, which it still is. But nitrogen fertilizer prices shouldn't be this high according to natural gas prices.
“The problem is that in 2005 most of the fertilizer suppliers and dealers took a very strong position on storage and they put a lot in storage anticipating an increase in spring sales,” he explained. “That increase didn't happen, there was excess supply in the country and the price went down. The first time in 30 years that I have been around the fertilizer business that spring prices were less than fall prices.
“That put a bad taste in the mouth of the fertilizer industry and they decided they weren't going to lay in those large supplies again this year,” he continued. “And in the mean time we have had all these ethanol plants come in. We're going to be seeding seven to eight percent more corn across the country and corn sucks up fertilizer many times more than what we would put on for wheat. In fact, if you look at a seven to eight percent increase in corn acres in the Corn Belt, that equals the amount of nitrogen and phosphorus that we apply in the entire state of North Dakota. So it's like adding an entire state of demand.
“And since the suppliers aren't filled up with product we have a shortage developing. You can't just call up St. Paul and have it come in, because they don't make nitrogen in the United States anymore. It's manufactured in countries like Kuwait and Venezuela, and you just don't call up Kuwait and ask them to send up a barge of nitrogen tomorrow. It doesn't happen and we have this huge shortage,” he added.
This shortage - and not so much the price of natural gas since that price is actually cheaper than it was last year - is actually what's created the increase in price.
Franzen noted that the fertilizer industry needs to develop a plan where they can order the product a year in advance with some confidence.
“It used to be fairly easy to predict,” he said. “You had farm programs and you had to plant so many acres of corn, so many acres of this and so many acres of that. Now, it's completely flexible and people can change their mind on a whim. So if you take a strong position on fertilizer and have a large supply you can get burned. But then if you take a weak position and you don't have enough for your customers that's a big problem, too.
“Somehow this problem needs to be resolved, and I think it's in the middle of being resolved now. Unfortunately, the prices are high and the growers are the ones that have to bear the brunt of all of this while they are trying to figure out what to do,” he concluded
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